Managing Income Management

The McClure report and other research has suggested that income management may be helpful to some, and for others it does not necessarily make things worse. In light of the 'budget emergency,' David Tennant, CEO of Family Care, questions the logic of income management in light of this, and the pitfalls and challenges for the people in his community who are subject to it.

There are a great many things that are positive about living in the country. There is, for example, fresh air, an absence of traffic jams, BIG skies and high quality fresh produce. And in the case of the Victorian regional community of Shepparton, there is income management. No, on second thoughts I probably would not include income management in the list of positives. Unless of course you add as a criterion for determining positive impact spending $20 million[1] to monitor part of the very low incomes of around 500 benefit recipients[2].

The interim report of the Welfare Reform Committee, led by former Mission Australia head Patrick McClure is certainly positive about the potential of income management to improve lives. According to the interim report:

"To date, various government-funded evaluations of income management in Australia have either been completed or are underway, with mixed findings. Overall, however, the evidence to date suggests that income management has assisted individuals and families to stabilise their financial circumstances, helped them meet priority needs, particularly the needs of children, and can protect vulnerable people from financial harassment and exploitation".[3]

A summary of the evaluation material prepared by the Parliamentary Library in June 2012 is slightly less convinced that a pattern exists:

"The overall picture emerging from the available evidence is one in which positive changes have been uneven and fragile. On the other hand, there is little evidence that income management is responsible for a worsening of the situation in areas in which it operates".[4]

After almost seven years and something in the order of $1 billion[5] in total expenditure (yes ‘b’, not ‘m’), even the most cautious and conservative policy analyst would be hoping for something a bit more definitive than 'it hasn't made things any worse'.

Amongst the patchy positives are reports of significant problems with both the design and impact of income management. Those negative views are most prevalent in relation to the compulsory referral mechanisms and they are entirely unsurprising. Telling people they have to submit to a form of personal financial management, without necessarily assessing whether they need or might benefit from that intervention is fraught. Then there is the fact that volunteers receive a $250 bonus benefit payment every six months they are involved. And finally, participants get a bright green EFT card with Basics printed prominently on it, announcing to any interested retailer, or fellow shopper 'I am not so good with money'.

Little wonder that some compulsory referees have described their experiences of income management as variously embarrassing, humiliating and demotivating.[6]

There undoubtedly are people who have benefited from income management and dysfunctional communities that have improved the safety of some very vulnerable people by quarantining income that might otherwise have been prey to abusive partners, friends or relatives. Income management should continue to be available as a tool that might assist in particular circumstances. But it desperately needs some principles to guide its operation. Principles like limiting choice and agency only as a last resort rather than via automatic trigger and providing access to a payment platform free of stigma and shame.

It is also high time for some honest, scaled debate about the genuine effectiveness of income management. In a time of reported budget emergency, considering the national rollout of an expensive program that has not done much of anything feels more than a little imprudent.


[1] The estimation of $20 million is based on the budgeted commitment of $117 million across the five placed-based income management trial sites

[2] Department of Social Services officers reported a total of 348 income management participants in Greater Shepparton at 16 May 2014, during recent Estimates hearings. Of those, 172 had participated for longer than 14 weeks.

[3] Department of Social Services, A New System for Better Employment and Social Outcomes – Interim Report of the Reference Group on Welfare Reform to the Minister of Social Services, Canberra, June 2014, page 84.

[4] Buckmaster L, Ey C and Klapdoor M, Income Management: an overview, Background Note, Australian Parliamentary Library, Parliament of Australia, Canberra, 21 June 2012, page 40.

[5] Buckmaster et al, ibid, page 24.

[6] Rob Bray J, Gray M, Hand K, Bradbury B, Eastman C and Katz I, Evaluating New Income Management in the Northern Territory: First Evaluation Report, Social Policy Research Centre of New South Wales, Sydney, July 2012, page xxiii.


Posted by Tanya Corrie